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• The index accelerates its upside beyond the 107.00 hurdle.
• Higher US yields underpin the strong rally in the greenback.
• JOLTs Job Openings next on tap in the US docket.

The USD Index (DXY), which tracks the greenback vs. a bundle of its main rival currencies, extends the robust uptrend above the 107.00 barrier to print new 2023 peaks on turnaround Tuesday.

USD Index looks at yields, data, Fed

The index advances for the third consecutive session and adds to the positive start of the week, recording new yearly peaks in levels last seen in November 2022, north of 107.00 the figure.

The equally sharp move higher in US yields across the curve also underpins the pronounced uptick in the dollar, which has been in place since mid-July and has entered its 12th consecutive week of gains so far.

The continuation of the upside bias in the greenback appears propped up by speculation of further tightening by the Federal Reserve (an extra rate hike is priced in before year-end), a view that has been reinforced by hawkish comments from FOMC M. Bowman on Monday.

In the US docket, the release of the JOLTs Job Openings will be in the limelight later in the NA session seconded by the speech by Atlanta Fed R. Bostic (2024 voter, hawk).

What to look for around USD

The greenback trades on a firmer note and surpasses the 107.00 hurdle to print new YTD highs on Tuesday.

In the meantime, support for the dollar keeps coming from the good health of the US economy, which at the same time appears underpinned by the renewed tighter-for-longer stance narrative from the Federal Reserve.

Key events in the US this week: JOLTs Job Openings (Tuesday) – MBA Mortgage Applications, ADP Employment Change, Final Services PMI, ISM Services PMI, Factory Orders (Wednesday) - Initial Jobless Claims, Balance of Trade (Thursday) – Nonfarm Payrolls, Unemployment Rate, Consumer Credit Change (Friday).

Eminent issues on the back boiler: Persevering debate over a soft or hard landing for the US economy. Incipient speculation of rate cuts in early 2024. Geopolitical effervescence vs. Russia and China.

USD Index relevant levels

Now, the index is gaining 0.13% at 107.16 and a breakout of 107.19 (2023 high October 3) would open the door to 107.99 (weekly high November 21, 2022) and finally 110.99 (high November 10, 2022). On the other hand, initial support emerges at 104.42 (weekly low September 11) ahead of 103.12 (200-day SMA) and then 102.93 (weekly low August 30).

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